DETERMINATION REPORT E-ENERGY B.V.

Transcription

1 DETERMINATION REPORT E-ENERGY B.V. DETERMINATION OF THE GREENHOUSE GASES EMISSION REDUCTION DUE TO REPLACEMENT OF POWER, GENERATED BY THE TRADITIONAL FUEL FIRED POWER PLANTS, AS A RESULT OF REHABILITATION AND CONSTRUCTION OF THE SMALL HYOPOWER PLANTS, OPERATED BY EЕА NOVOSVIT AND ENERGOINVEST, LTD REPORT NO. UKRAINE/0011/2008 REVISION NO. 03 BUREAU VERITAS CERTIFICATION

2 DETERMINATION REPORT Report Ukraine/0011/2008 2

3 TRADITIONAL FUEL FIRED POWER PLANTS, AS A RESULT OF REHABILITATION AND CONSTRUCTION OF THE SMALL HYOPOWER PLANTS, OPERATED BY EЕА NOVOSVIT AND ENERGOINVEST, LTD Abbreviations CAR Corrective Action Request JI Joint Implementation ERU Emission Reduction Unit EIA Environmental Impact Assessment CL Clarification Request CO 2 Carbon Dioxide AIE Accredited Independent Entity GHG Green House Gas(es) HPP Hydro Power Plant I Interview IETA International Emissions Trading Association MoV Means of Verification MP Monitoring Plan NGO Non Government Organization PCF Prototype Carbon Fund PDD Project Design Document UNFCCC United Nations Framework Convention for Climate Change 3

4 TRADITIONAL FUEL FIRED POWER PLANTS, AS A RESULT OF REHABILITATION AND CONSTRUCTION OF THE SMALL HYOPOWER PLANTS, OPERATED BY EЕА NOVOSVIT AND ENERGOINVEST, LTD Table of Contents Page 1 INTRODUCTION Objective Scope GHG Project Description Determination team 7 2 METHODOLOGY Review of Documents Follow-up Interviews Resolution of Clarification and Corrective Action Requests 10 3 DETERMINATION FINDINGS Project Design Baseline Monitoring Plan Calculation of GHG Emissions Environmental Impacts Comments by Local Stakeholders 17 4 COMMENTS BY PARTIES, STAKEHOLDERS AND NGOs DETERMINATION OPINION REFERENCES Appendix A: Determination Protocol Appendix B: Verifiers CV s 4

5 TRADITIONAL FUEL FIRED POWER PLANTS, AS A RESULT OF REHABILITATION AND CONSTRUCTION OF THE SMALL HYOPOWER PLANTS, OPERATED BY EЕА NOVOSVIT AND ENERGOINVEST, LTD 1 INTRODUCTION E-Energy B.V. has commissioned Bureau Veritas Certification to determinate its JI project Greenhouse gases emission reduction due to replacement of power, generated by the traditional fuel fired power plants, as a result of rehabilitation and construction of the small hydropower plants, operated by EЕА Novosvit and Energoinvest, Ltd (hereafter called the project ) located in Vinnytsya, Khmelnytsky, Ternopil, Chernivtsi, Cherkasy, Ivano-Frankivsk and Lviv regions, Ukraine. This report summarizes the findings of the determination of the project, performed on the basis of UNFCCC criteria, as well as criteria given to provide for consistent project operations, monitoring and reporting. 1.1 Objective The determination serves as project design verification and is a requirement for all projects. The determination is an independent third party assessment of the project design. In particular, the project's baseline, the monitoring plan (MP), and the project s compliance with relevant UNFCCC and host country criteria are determined in order to confirm that the project design, as documented, is sound and reasonable, and meet the stated requirements and identified criteria. Determination is a requirement for all JI projects and is seen as necessary to provide assurance to stakeholders of the quality of the project and its intended generation of emission reduction units (ERUs). UNFCCC criteria refer to Article 6 of the Kyoto Protocol, the JI rules and modalities and the subsequent decisions by the JI Supervisory Committee, as well as the host country criteria. 1.2 Scope The determination scope is defined as an independent and objective review of the project design document, the project s baseline study and monitoring plan and other relevant documents. The information in these documents is reviewed against Kyoto Protocol requirements, UNFCCC rules and associated interpretations. The determination is not meant to provide any consulting towards the Client. However, stated requests for clarifications and/or corrective actions may provide input for improvement of the project design. 1.3 GHG Project Description The project s main goal is the reduction of the greenhouse gases emissions from the thermal power plants which consume traditional fossil fuel by means of replacement of electric power generated by them to the state grid with the electric power generated by the small hydro power plants as a renewable, due to rehabilitation, renewing and retrofit of 5

6 TRADITIONAL FUEL FIRED POWER PLANTS, AS A RESULT OF REHABILITATION AND CONSTRUCTION OF THE SMALL HYOPOWER PLANTS, OPERATED BY EЕА NOVOSVIT AND ENERGOINVEST, LTD existing obsolete small HPPs and building of the new ones. Increasing of the capacities and share of the hydro power generating in total power scope will result in greenhouse gases emissions reduction from the generating enterprises of Ukraine relative to the current practice. In Ukraine the small hydro power plants were used for production of both mechanical and electric energy since fifties of the 20-th century. However, the advantages of the centralized production of electric power and highvoltage transmission in the recent half-century have led to that a lot of small hydro-electric power plants became neglected and fall into decay. At the beginning of the 21-th century the growing significance of ecological problems, promoted interest to the renewing energy sources as well as the necessity of improving the reliability of power supply to rural area caused the interest to renewing of the small HPPs. Renovation of the small HPPs will help to solve the ecology problems, to improve infrastructure of rural regions, to create the systems of reliable local power supply, to improve water supply, to advance the fish industry, etc. The project foresees the increase of power generation by means of capacity increasing, rehabilitation of existing and construction of the new hydroelectric generators at the existing and new small hydro power plants, operated by EЕА Novosvit and Energoinvest, Ltd., on the rivers of Pivdennyj Buh, Zbruch, Ushytsya, Ros, Hirskyj Tykych, Hnylyj Tykych, Sluch, Koropets, Bily Cheremosh, Perclub, Sarata, Yalovechora, Murafa, Prut, Stryj and Zolota Lypa. It will result in the reduction of greenhouse gases, namely СО 2, emissions due to decreasing of the power production by the power generating capacities of the state grid of Ukraine. The supplier for this project is the External Еconomic Аssociation Novosvit, which at present operates 15 small hydropower plants with the installed capacity of kw. The first three of them (Sandratska HPP, Gordashivska HPP and Bodnarivska HPP) were renovated in by the Ukrainian Energy Consortium, the founder of the EЕА Novosvit, and were then rented by EЕА Novosvit, these small HPP are not included in the project. After getting experience on their renovation and operation, the EЕА Novosvit made the decision to rent and renovate step-by-step several small HPP. The other 12 already rehabilitated/constructed are included in the project, as well as 9 HPPs that are planned for rehabilitation/ construction, in total 21 small HPPs with total scheduled installed capacity of MW. Also, the EЕА Novosvit is empowered to represent in this project the interests of company Energoinvest», Ltd., which at present operates 11 already rehabilitated/constructed small hydropower plants with total installed capacity of MW. 10 of these small HPPs are included in the project, as well as 2 HPP which are planed to retrofit, in total 12 small HPPs with total scheduled installed capacity of MW. Thus, in frames of this project, the total installed capacity of the 22 small hydropower plants that are already rehabilitated/renovated up to the end of 2009, is MW, and the total installed capacity of all 33 small hydropower plants included in the project at the present stage is planned to be MW. 6

7 TRADITIONAL FUEL FIRED POWER PLANTS, AS A RESULT OF REHABILITATION AND CONSTRUCTION OF THE SMALL HYOPOWER PLANTS, OPERATED BY EЕА NOVOSVIT AND ENERGOINVEST, LTD 1.4 Determination team The determination team consists of the following personnel: Nadiya Kaiiun Bureau Veritas Certification, Team leader, Climate Change Lead Verifier Igor Kachan, Bureau Veritas Certification, Team member, Climate Change Verifier Olena Manziuk, Bureau Veritas Certification, Team member, Climate Change Verifiertrainee Denis Pischalov, Bureau Veritas Certification, Team member, Financial Specialist The determination report was reviewed by: Ivan Sokolov Bureau Veritas Certification, Internal Technical Reviewer 2 METHODOLOGY The overall determination, from Contract Review to Determination Report & Opinion, was conducted using Bureau Veritas Certification internal procedures. In order to ensure transparency, a determination protocol was customized for the project, according to the Determination and Verification Manual (IETA/PCF). The protocol shows, in a transparent manner, criteria (requirements), means of verification and the results from determining the identified criteria. The determination protocol serves the following purposes: It organizes, details and clarifies the requirements a JI project is expected to meet; It ensures a transparent determination process where the determinator will document how a particular requirement has been determined and the result of the determination. The determination protocol consists of five tables. The different columns in these tables are described in Figure 1. 7

8 TRADITIONAL FUEL FIRED POWER PLANTS, AS A RESULT OF REHABILITATION AND CONSTRUCTION OF THE SMALL HYOPOWER PLANTS, OPERATED BY EЕА NOVOSVIT AND ENERGOINVEST, LTD The completed determination protocol is enclosed in Appendix A to this report. Determination Protocol Table 1: Mandatory Requirements Requirement Reference Conclusion Cross reference The requirements the project must meet. Gives reference to the legislation or agreement where the requirement is found. This is either acceptable based on evidence provided (), a Corrective Action Request (CAR) or a Clarification Request (CL) of risk or noncompliance with stated requirements. The CAR s and CL's are numbered and presented to the client in the Determination Report. Determination Protocol Table 2: Requirements Used to refer to the relevant protocol s in Tables 2, 3 and 4 to show how the specific requirement is determined. This is to ensure a transparent determination process. Checklist Question Referenc e Means verification (MoV) of Comment Draft and/or Final Conclusion The various requirements in Table 1 are linked to s the project should meet. The various requirements of baseline and monitoring methodologies should be met. The is organized in several sections. Each section is then further subdivided. The lowest level constitutes a. Gives reference to document s where the answer to the or item is found. Explains how conformance with the is investigated. Examples of means of verification are document review () or interview (I). N/A means not applicable. The section is used to elaborate and discuss the and/or the conformance to the. It is further used to explain the conclusions reached. This is either acceptable based on evidence provided (), or a Corrective Action Request (CAR) due to non-compliance with the. (See below). Clarification Request (CL) is used when the determination team has identified a need for further clarification. Determination Protocol Table 3: Legal requirements Checklist Question Reference Means of verification (MoV) Comment Draft and/or Final Conclusion The national legal requirements the Gives reference Explains how conformance The section is used to This is either acceptable based 8

9 TRADITIONAL FUEL FIRED POWER PLANTS, AS A RESULT OF REHABILITATION AND CONSTRUCTION OF THE SMALL HYOPOWER PLANTS, OPERATED BY EЕА NOVOSVIT AND ENERGOINVEST, LTD project must meet. to documents where the answer to the or item is found. with the is investigated. Examples of means of verification are document review () or interview (I). N/A means not applicable. elaborate and discuss the and/or the conformance to the. It is further used to explain the conclusions reached. on evidence provided (), or a Corrective Action Request (CAR) due to non-compliance with the. (See below). Clarification Request (CL) is used when the determination team has identified a need for further clarification. Determination Protocol Table 4: Resolution of Corrective Action and Clarification Requests Report clarifications and corrective action requests If the conclusions from the Determination are either a Corrective Action Request or a Clarification Request, these should be listed in this section. Ref. to in tables 2/3 Reference to the number in Tables 2, 3 and 4 where the Corrective Action Request or Clarification Request is explained. Figure 1 Determination protocol tables Summary project response of owner The responses given by the Client or other project participants during the communications with the determination team should be summarized in this section. Determination conclusion This section should summarize the determination team s responses and final conclusions. The conclusions should also be included in Tables 2, 3 and 4, under Final Conclusion. 2.1 Review of Documents The Project Design Document (PDD version 05) was submitted by E- Energy B.V. 16/02/2010 together with supporting documentation in terms of calculation of GHG emission. PDD Version 05 was made publicly available for comments on Bureau Veritas Ukraine site from 18 February PDD Version 05 and supporting documentation as well as additional background documents related to the project design, baseline, and monitoring plan, such as Kyoto Protocol, host Country laws and regulations, JI guidelines, JISC Guidance on criteria for baseline setting and monitoring, and Guidelines for users of the JI PDD Form were reviewed. The first deliverable of the document review was the Draft Determination Report with 38 CAR s and 8 CL. To address Bureau Veritas Certification corrective action and clarification requests, E-Energy B.V. revised the PDD and as a response issued PDD version 07 dated 23/11/2010 and resubmitted it on 23/11/2010. The determination findings presented in this report relating to the project as described in the PDD version 05 and 06. 9

10 TRADITIONAL FUEL FIRED POWER PLANTS, AS A RESULT OF REHABILITATION AND CONSTRUCTION OF THE SMALL HYOPOWER PLANTS, OPERATED BY EЕА NOVOSVIT AND ENERGOINVEST, LTD 2.2 Follow-up Interviews On 24/03/2010 Bureau Veritas Certification performed interviews with project stakeholders to confirm selected information and to resolve issues identified in the document review. Representatives of EЕА Novosvit and project developer the Institute of Engineering Ecology were interviewed (see References). The main topics of the interviews are summarized in Table1. Table 1 Interviewed organization EЕА Novosvit Local community representatives Interview topics Institute of Engineering Ecology Interview topics Organizational structure. Responsibilities and authorities. Training of personnel. Quality management procedures and technology. Rehabilitation/Implementation of equipment (records). Metering equipment control. Metering record keeping s ystem, database. Local stakeholder s response. Social impacts. Baseline methodology. Monitoring plan. 2.3 Resolution of Clarification and Corrective Action Requests The objective of this phase of the determination is to raise the requests for corrective actions and clarification and any other outstanding issues that needed to be clarified for Bureau Veritas Certification positive conclusion on the project design. To guarantee the transparency of the determination process, the concerns raised are documented in more detail in the determination protocol in Appendix A. 3 DETERMINATION FINDINGS In the following sections, the findings of the determination are stated. The determination findings for each determination subject are presented as follows: 1) The findings from the desk review of the original project design documents and the findings from interviews during the follow up visit are summarized. A more detailed record of these findings can be found in the Determination Protocol in Appendix A. 2) Where Bureau Veritas Certification had identified issues that needed clarification or that represented a risk to the fulfillment of the project objectives, a Clarification or Corrective Action Request, respectively, have been issued. The Clarification and Corrective Action Requests are stated, where applicable, in the following sections and are further documented in the Determination Protocol in Appendix A. The 10

11 TRADITIONAL FUEL FIRED POWER PLANTS, AS A RESULT OF REHABILITATION AND CONSTRUCTION OF THE SMALL HYOPOWER PLANTS, OPERATED BY EЕА NOVOSVIT AND ENERGOINVEST, LTD determination of the Project resulted in 38 Corrective Action Requests and 9 Clarification Requests. 3) The conclusions for determination subject are presented. 3.1 Project Design Bureau Veritas Certification recognizes that this Project is helping the host country fulfill its goals of promoting sustainable development. The project is expected to be in line with the host-country specific JI requirements. The Project Scenario is considered additional in comparison to the baseline scenario, and therefore eligible to receive Emissions Reductions Units (ERUs) under the JI, based on an analysis, presented by the PDD, of investment, technological and other barriers, and prevailing practice. The project design is sound and the geographical (Project site is Vinnytsya, Khmelnytsky, Ternopil, Chernivtsi, Cherkasy, Ivano-Frankivsk and Lviv regions, Ukraine) and temporal (382 months) boundaries of the project are clearly defined. CARs, CLs (CAR1-CAR6, CAR27-CAR29, CL1-CL4) and their resolution/conclusion applicable to project design are listed in the APPENDIX A: DETERMINATION PROTOCOL (Table 4) below. The project has no approvals by the Parties involved, therefore CAR1 remains pending. 3.2 Baseline and Additionality The Greenhouse gases emission reduction due to replacement of power, generated by the traditional fuel fired power plants, as a result of rehabilitation and construction of the small hydropower plants, operated by EЕА Novosvit and Energoinvest, Ltd project uses the baseline and monitoring approach developed according and meets the relevant UNFCCC requirements for the JI and the relevant host country criteria. Thus, the approved consolidated baseline and monitoring methodology ACM0002 Consolidated baseline methodology for grid-connected electricity generation from renewable sources (version 09, valid from 13 February, 2009) has been used for the baseline scenario construction, where the project foresees the emission reduction due to rehabilitation and construction of new hydro power plants and reduction of power production by fossil fuel power plants. This methodology ACM0002 is applicable to grid-connected renewable power generation project activities that involve electricity capacity addition. The proposed project deals with the grid-connected renewable power generation and activities in frames of it involve electricity capacity addition through rehabilitation and renovation of existing small hydropower plants and construction of new mini hydropower plants; thus it meets the area of applicability of methodology ACM0002. The methodology АCМ0002 is applicable, in particular, under the following conditions: - The project activity is the installation or modification/retrofit of a power plant/unit of one of the following types: hydro power plant/unit (either with 11

12 TRADITIONAL FUEL FIRED POWER PLANTS, AS A RESULT OF REHABILITATION AND CONSTRUCTION OF THE SMALL HYOPOWER PLANTS, OPERATED BY EЕА NOVOSVIT AND ENERGOINVEST, LTD a run-of-river reservoir or an accumulation reservoir), wind power plant/unit, geothermal power plant/unit, solar power plant/unit, wave power plant/unit or tidal power plant/unit. - In case of hydro power plants: a) The project activity is implemented in an existing reservoir, with no change in the volume of reservoir; b) The project activity is implemented in an existing reservoir, where the volume of reservoir is increased and the power density of the project activity, as per definitions given in the Project Emissions section, is greater than 4 W/m 2 ; c) The project activity results in new reservoirs and the power density of the power plant, as per definitions given in the Project Emissions section, is greater than 4 W/m 2. d) The geographic and system boundaries for the relevant electricity grid can be clearly identified and information on the characteristics of the grid is available; and - 5 years of historical data (or 3 years in the case of non hydro project activities) have to be available for those project activities where modification/retrofit measures are implemented in an existing power plant. In the proposed project: - The project activity is the installation or modification/retrofit of hydro power plants with run-of-river reservoirs. - The project activity is implemented in existing reservoirs, with no change in the volume of a reservoir. Only one new mini-hpp is constructed and one is planned to be constructed, both at escapage of existing HPP without a new reservoir. - The geographic and system boundaries for the relevant electricity grid are clearly identified since this is the joined state grid, and information on the characteristics of the grid is available; and - 5 years of historical data are available for those project activities where modification/retrofit measures are implemented in an existing power plant. Moreover, prior to the project activity the most of the small HPP included in the project were out of operation for a long period of time (for decades). Thus the proposed project complies with all criteria of the methodology АCМ0002; also this methodology does not include any limits concerning the minimum of capacity which is installed/retrofitted in the project. The small-scale methodology AMS-I.D is not applicable to the project, because the project was previously the part of the larger project District Heating System Rehabilitation in Vinnytsya, and the total scheduled power capacity of all included small HPP is over the eligibility limit of 15 MW for a small-scale project activity. Baseline development, project additionality background and the assessment of green-house gases emissions reduction were hold according to the approved consolidated baseline and monitoring methodology ACM0002 Consolidated baseline methodology for gridconnected electricity generation from renewable sources (version 09). Identification of the baseline scenario: 12

13 TRADITIONAL FUEL FIRED POWER PLANTS, AS A RESULT OF REHABILITATION AND CONSTRUCTION OF THE SMALL HYOPOWER PLANTS, OPERATED BY EЕА NOVOSVIT AND ENERGOINVEST, LTD For modification/retrofit of an existing grid-connected renewable power plant/unit the baseline scenario is the following: In the absence of the JI project activity, the existing facility would continue to supply electricity to the grid at historical average levels, until the time at which the generation facility would likely be replaced or retrofitted. According to the previous practice in Ukraine, this time is over 30 years. The additionality of the project activity is demonstrated and assessed below in accordance with the approved consolidated baseline and monitoring methodology ACM0002 Consolidated baseline methodology for grid-connected electricity generation from renewable sources (version 09), using the Tool for the demonstration and assessment of additionality (version 5.2). It was identified three realistic and credible options for baseline scenario for power generation the proposed project activity with registration as a JI project activity, and two alternatives to this project: - the proposed project activity, undertaken without being registered as a JI project activity; - the continuation of the current situation, i.e. to use all power generation equipment that was already in use prior to the implementation of the project activity and undertaking business as usual maintenance, without rehabilitation of existing HPP or construction of new HPP; In the absence of the project activity, the existing facilities would continue to supply electricity to the grid at historical levels. The first alternative requires substantial. Without carbon credits sales the project is not economically favourable for a Supplier, which is financially unattractive due to the high capital costs comparably to the operational costs of the company and long pay back period for investments, and makes implementation of most activities impossible. The second alternative is the continuation of the current situation (no project activity or other alternatives undertaken), i.e. business-as-usual scenario without or with minimum maintenance works at operating small HPP and without any rehabilitation works at non-operating small HPP, in this case no replacement of power generated at the power plants in the power systems consuming the fossil fuel would take place. This scenario is less environmentally favourable for the near future (including first commitment period ), since GHGs emissions from power generation to grid will continue to be kept at the same level or even higher (due to degradation of the equipment), but economically such scenario is more attractive. Consistency with mandatory laws and regulations: According to The Law of Ukraine On Power Energy 575/97VR dated October 16, 1997 (in reduction from April 25, 2009), execution of business activity in fields of electricity production, distribution and supply require a license that is to be issued by the National Power Energy Regulation Committee of Ukraine. The EEA Novosvit and Energoinvest», Ltd. have the necessary licenses for supply of the electric power by the unregulated tariff, according to the 13

14 TRADITIONAL FUEL FIRED POWER PLANTS, AS A RESULT OF REHABILITATION AND CONSTRUCTION OF THE SMALL HYOPOWER PLANTS, OPERATED BY EЕА NOVOSVIT AND ENERGOINVEST, LTD Law of Ukraine On Power Energy, as well as other licenses and permissions necessary for the project implementation. There are no legal or regulatory requirements in Ukraine which oblige to rehabilitate or renovate the obsolete small HPPs at small rivers in country regions; in any case the local administrations that usually are the owners of small HPPs have not enough funds for such activity. Thus the described alternatives are in compliance with the mandatory laws and regulations. The investments analysis included in the PDD and the annexes show that the project is not attractive for investments, but using of JI mechanism enables to improve such attractiveness. The project can not be implemented without carbon credits because of some barriers, such as: - investment barrier. For the investor, the project of such kind is not enough attractive for making investments. The discount rate in Ukrainian banks is very high, and placing money in bank is more attractive and less risky than investing into this project. - technological barrier (there are difficulties caused by the need of individual approach in designing, purchasing and installing of hydro power equipment for each power plant or unit. Skilled and/or properly trained personnel necessary to operate and maintain the small HPP is practically not available in some villages neighbouring to the HPPs, which leads to an unacceptably high risk of equipment disrepair, malfunctioning or other underperformance). - organizational barrier (the difficulties concerning the relations with electric energy pricing regulative body could occur). Therefore, the proposed project activity faces various serious barriers that prevent the implementation of the proposed project activity; and do not prevent at least one of the alternatives continuation of the current situation, i.e. business-as-usual scenario. It is stated in the PDD that not any similar activities on rehabilitation of the obsolete small HPPs that have been implemented previously or are currently underway are observed in Ukraine. In general, all additionality tests have shown a positive result which proves that JI project as additional. CARs, CLs (CAR7-CAR26, CL5-CL8) and their resolution/conclusion applicable to baseline and additionality are listed in the APPENDIX A: DETERMINATION PROTOCOL (Table 4) below. 3.3 Monitoring Plan Monitoring plan is chosen according to the approved consolidated baseline and monitoring methodology ACM0002 Consolidated baseline methodology for grid-connected electricity generation from renewable sources (version 09) and meets the relevant UNFCCC requirements for the JI project and the relevant host country criteria. The most objective and cumulative factor that will give a clear picture of whether emission reductions really took place is the increasing of effective output of power by a small HPP. It can be identified as a 14

15 TRADITIONAL FUEL FIRED POWER PLANTS, AS A RESULT OF REHABILITATION AND CONSTRUCTION OF THE SMALL HYOPOWER PLANTS, OPERATED BY EЕА NOVOSVIT AND ENERGOINVEST, LTD difference between baseline effective output and effective output of power after project implementation. EEA Novosvit and Energoinvest, Ltd. collect and keep the data on generation of power in form of electronic files and acts and on effective output of power to the grid in form of acts, bills and reports. The detailed description of the parameters to be monitored is presented in section D of the PDD and was found satisfactory. CARs (CAR30-CAR34) and their resolution/conclusion applicable to monitoring plan are listed in the APPENDIX A: DETERMINATION PROTOCOL (Table 4) below. 3.4 Calculation of GHG Emissions As per approach proposed, the emissions reduction will be achieved due to creation and increasing of installed and operational capacity of small hydropower plants by means of their rehabilitation and construction of new hydropower units. Implementation of this activity will provide the substituting amount of power to the consumers without consumption of carbon-intensive fossil fuel. Therefore, due to project implementation the fuel consumption at the conditional traditional power plant connected to the grid for generation of this substituting amount of power will be zero relatively to the baseline fuel consumption, and corresponding emissions will be zero. In accordance with ACM0002 Consolidated baseline methodology for grid-connected electricity generation from renewable sources, the project emissions from water reservoirs of hydro power plants in year y (PE HP, y ) should be taken into account only if hydro power project activities result in new reservoirs or in the increase of existing reservoirs. In case of this project no new reservoirs are to be created and no increase of existing reservoirs is planned, thus project emissions in year y PE y =0. Thereafter, the project emissions will be zero. According to ACM0002 Consolidated baseline methodology for gridconnected electricity generation from renewable sources, the baseline emissions, which include only the CO 2 emissions from electricity generation by the traditional fossil fuel power plants that are displaced due to the project activity, are calculated as follows: Where: BE y - baseline emissions in year y (tco 2 /yr) EG y - electricity supplied by the project activity to the grid (MWh) EG baseli ne - baseline electricity supplied to the grid in the case of modified or retrofit facilities (MWh). EF gr id,cm, y - combined margin CO 2 emission factor for grid connected power generation in year y. According to the proposed approach baseline emissions consist of one type of GHG emissions: CO 2 emissions from electricity generation to the grid by the traditional thermal power generating units which consume the fossil fuel, in amount that will be replaced after project implementation and increasing of power generation by the small hydropower plants. Emission reductions are calculated as follows: 15

16 TRADITIONAL FUEL FIRED POWER PLANTS, AS A RESULT OF REHABILITATION AND CONSTRUCTION OF THE SMALL HYOPOWER PLANTS, OPERATED BY EЕА NOVOSVIT AND ENERGOINVEST, LTD ER y = BE y PE y LE y Where: ER y - emission reductions in year y (tco 2 /yr) BE y - baseline emissions in year у (tco 2 /yr) PE y - project emissions in year у (tco 2 /yr) LE y - leakage emissions in year у (tco 2 /yr) Average annual emissions reduction after complete project implementation is supposed to be tco 2 equivalent. Total installed capacity of all 33 small hydropower plants included in the project at the present stage is planned to be MW. No areas of concern applicable to calculation of GHG emissions were identified. 3.5 Environmental Impacts According to the Ukrainian legislation (Laws of Ukraine On the Environment Protection (1991), On the Ecological Expertise (1995), On Wastes (1998), Water Code of Ukraine (1995), Soil Code of Ukraine (2001) etc) the design documentation for the new building, reconstruction and technical re-equipment of industrial and civil objects must include the environmental impact assessment, the main requirements for which are listed in the State Building Norms of Ukraine A Structure and content of documents on environmental impact assessment when designing and constructing of enterprises, buildings and structures. EЕА Novosvit and Еnenrgoinvest, Ltd. has the necessary Environmental Impact Assessments for their activity according to Ukrainian legislation. In general, the project will have positive effect on the environment. At the rehabilitation of the neglected small hydropower plants the renovation and purification of the specific conservation reservoirs and parts of the river from the silt and wastes is carried out. Fuel consumption reduction by the traditional power plant at the power generation plants using the fossil fuel will reduce emissions of SO x, NO x, CO and particulate matter. Impact on the water medium Impact on the water medium is positive. At the rehabilitation of neglected small hydropower plants the renovation and purification of specific conservation reservoirs and parts of the river from the silt and wastes is carried out. Operation of small HPPs makes possible to regulate a daily water flow, floods and ice drifting, prevent under flooding of soil and buildings, to carry out bank stabilization, purification of rivers and derivation channels, to provide sanitary dumping of water from reservoirs. Project implementation will provide improvement of the basic channel of the rivers, including the zones of recreation. By regular washing of a channel, improvement of a bottom condition the decrease of microbial pollution of water will be achieved. Installation of miniturbines does not lead to changes of an existing hydrological mode. Moreover, water is enriched by oxygen. So, for example, at Korsun'-Shevchenkivsky water basin the water intake is 16

17 TRADITIONAL FUEL FIRED POWER PLANTS, AS A RESULT OF REHABILITATION AND CONSTRUCTION OF THE SMALL HYOPOWER PLANTS, OPERATED BY EЕА NOVOSVIT AND ENERGOINVEST, LTD carried out from depth of 0.83 m (a mark 98.98), that is 3.27 m above the previous mark. Besides, on tail-water reach it is established water-split well, at falling in which from height of 6.5 m water is additionally sated with oxygen, which is more, than at usual passage through overflow dam with difference of heights of 2.9 m. Effects on land use Green plantings and natural landscape are not subject to changes. Water basin operation will be carried out according to Service regulations in which the safe mode of operation of a water basin is defined (dam and water outflow operation, level water basin mode, the minimum expenses of water for the normal sanitary-biological condition of the river, filling and draining of water basin). Project implementation will provide improvement of the basic channel of the rivers, including the zones of recreation. The project implementation will not entail any change of the area of water basin or the flooded land areas. Effects on biodiversity The project has obtained positive conclusions of the regional main administrations of fishing control subject to carrying out observations with the aim of determining the quantity and state of fishing resources after the siphon appliance with the aim of determining the need of fish-protective appliance installation. The fishery characteristics of the appropriate river area are analyzed. Hydrounits at work, owing to a turn of turbines, produce noise which extends in thickness of water that creates acoustic effect of fish protection. Waste generation, treatment and disposal At the project implementation waste generation will occur after disassembling of physically and morally obsolete equipment at the rehabilitation of hydraulic units of hydropower plants. The industrial and discharged waters are absent when operating the HPPs. CAR36 and CAR37 and their resolution/conclusion applicable to environmental impacts are presented in the APPENDIX A: DETERMINATION PROTOCOL (Table 4) below. 3.6 Comments by Local Stakeholders As the activities by the project do not foresee the negative impact on the environment and negative social effect, the special public discussion was not necessary. Moreover, project implementation will provide improvement of sanitary conditions of the zones of recreation. Consults with Stakeholders have been hold at the sessions of local authorities, also through newspapers publications, scientific seminars and publications. The local community was informed about the start of the project by declarations of intent, published in local newspapers. The local community, which is presented by local councils, has approved the project. During the determination at site visit local representative was interviewed (chairman of village council) and only positive response was observed. 17

18 TRADITIONAL FUEL FIRED POWER PLANTS, AS A RESULT OF REHABILITATION AND CONSTRUCTION OF THE SMALL HYOPOWER PLANTS, OPERATED BY EЕА NOVOSVIT AND ENERGOINVEST, LTD 4 COMMENTS BY PARTIES, STAKEHOLDERS AND NGOs According to the modalities for the Determination of JI projects, the AIE shall make publicly available the project design document and receive, within 30 days, comments from Parties, stakeholders and UNFCCC accredited non-governmental organizations and make them publicly available. Bureau Veritas Certification published the project documents on the website on 18/02/2010 and invited comments by Parties, stakeholders and non-governmental organizations. There are no comments from stakeholders. 5 DETERMINATION OPINION Bureau Veritas Certification has performed a determination of the Greenhouse gases emission reduction due to replacement of power, generated by the traditional fuel fired power plants, as a result of rehabilitation and construction of the small hydropower plants, operated by EЕА Novosvit and Energoinvest, Ltd project in Ukraine. The determination was performed on the basis of UNFCCC criteria and host country criteria and also on the criteria given to provide for consistent project operations, monitoring and reporting. The determination consisted of the following three phases: i) a desk review of the project design and the baseline and monitoring plan; ii) follow-up interviews with project stakeholders; iii) the resolution of outstanding issues and the issuance of the final determination report and opinion. Project participant/s used the latest tool for demonstration of the additionality. In line with this tool, the PDD provides analysis of investment, technological and other barriers to determine that the project activity itself is not the baseline scenario. An analysis of the investment and technological barriers demonstrates that the proposed project activity is not a likely baseline scenario. Emission reductions attributable to the project are hence additional to any that would occur in the absence of the project activity. Given that the project is implemented and maintained as designed, the project is likely to achieve the estimated amount of emission reductions. The review of the project design documentation (version 07) and the subsequent follow-up interviews have provided Bureau Veritas Certification with sufficient evidence to determine the fulfillment of stated criteria. In our opinion, the project correctly applies and meets the relevant UNFCCC requirements for the JI and the relevant host country criteria. The determination is based on the information made available to us and the engagement conditions detailed in this report. 18

19 TRADITIONAL FUEL FIRED POWER PLANTS, AS A RESULT OF REHABILITATION AND CONSTRUCTION OF THE SMALL HYOPOWER PLANTS, OPERATED BY EЕА NOVOSVIT AND ENERGOINVEST, LTD 6 REFERENCES Category 1 Documents: Documents company that relate directly to the GHG components of the project. PDD Greenhouse gases emission reduction due to replacement of power, generated by the traditional fuel fired power plants, as a /1/ result of rehabilitation and construction of the small hydropower plants, operated by EЕА Novosvit and Energoinvest, Ltd, version 05, dated PDD Greenhouse gases emission reduction due to replacement of power, generated by the traditional fuel fired power plants, as a /2/ result of rehabilitation and construction of the small hydropower plants, operated by EЕА Novosvit and Energoinvest, Ltd, version 06, dated PDD Greenhouse gases emission reduction due to replacement of power, generated by the traditional fuel fired power plants, as a /3/ result of rehabilitation and construction of the small hydropower plants, operated by EЕА Novosvit and Energoinvest, Ltd, version 07, dated /4/ Decree of Cabinet of Ministers of Ukraine 206, dated /5/ Glossary of JI terms, ver. 02, JISC. JISC Clarification regarding the public availability of documents under /6/ the verification procedure under the Joint Implementation Supervisory Committee, ver. 03. /7/ Guidelines for users Joint of the Implementation Project Design Document Form, ver. 04, JISC /8/ 2006 IPCC Guidelines for National Greenhouse Inventories. Energy. /9/ Letter of Endorsement # 4907/11/10-08 dated issued by the National Environmental Investments Agency of Ukraine Guidance on criteria for baseline setting and monitoring (version 02), /10/ JISC Category 2 Documents: Background documents related to the design and methodologies employed in the design or other reference documents. /1/ Statement АП # of state admission of getting into operation of built facility dated September 2007 at Korsun-Shevchenkivskyi city. /2/ Statement of getting into industrial operation of automated system of electrical energy commercial accounting dated of Foreign Trade Association "Novosvit" Korsun-Shevchenkivska mini-hpp. /3/ Statement of getting into industrial operation of automated system of electrical energy commercial accounting dated of Foreign Trade Association "Novosvit" Lotashivska HPP. /4/ Statement of getting into industrial operation of automated system of electrical energy commercial accounting dated of Foreign Trade Association "Novosvit" Korsun-Shevchenkivska HPP. 19

20 TRADITIONAL FUEL FIRED POWER PLANTS, AS A RESULT OF REHABILITATION AND CONSTRUCTION OF THE SMALL HYOPOWER PLANTS, OPERATED BY EЕА NOVOSVIT AND ENERGOINVEST, LTD /5/ Statement of getting into industrial operation of automated system of electrical energy commercial accounting dated of Foreign Trade Association "Novosvit" Steblivska HPP. /6/ Statement of check to compliance with requirements of environmental protection legislation dated Lotashivska HPP. /7/ Statement of check of metering equipment of electrical energy dated FTA "Novosvit" Lotashivska HPP. /8/ Statement of check of metering equipment of electrical energy dated FTA "Novosvit" Korsun-Shevchenkivska mini-hpp. /9/ Statement ЧК # of state admission of getting into operation of built facility dated at Lotasheve village. /10/ License АБ # to electrical energy generation by Foreign Trade Association "Novosvit" License is valid from to /11/ Passport 1ГГ ПС of current transformer ТОЛ-10-І-2 У2, ser. # /12/ Passport 1ГГ ПС of current transformer ТОЛ-10-І-2 У2, ser. # /13/ Passport of voltage transformer НТМИ-І-10 У3, ser. #2239. /14/ Protocol of electrical energy meters SL7000 verification of FTA "Novosvit" of Cherkasy branch, ser. number of the meter , ser. number of the meter , ser. number of the meter , ser. number of the meter , ser. number of the meter , ser. number of the meter /15/ Account #304 of advance payment dated for planned electrical energy for February 2009 estimated /16/ Account #359 of advance payment dated р.for planned electrical energy for December 2009 estimated /17/ Sales invoice #304 dated for electricity energy consumption for January /18/ Sales invoice #304 dated for electricity energy consumption for May /19/ Sales invoice #304 dated for electricity energy consumption for March /20/ Sales invoice #304 dated for electricity energy consumption for August /21/ Sales invoice #304 dated for electricity energy consumption for November /22/ Sales invoice #304 dated for electricity energy consumption for January /23/ Sales invoice #304 dated for electricity energy consumption for April /24/ Sales invoice #304 dated for electricity energy consumption for July /25/ Sales invoice #304 dated for electricity energy consumption for September /26/ Sales invoice #304 dated for electricity energy consumption for October /27/ Sales invoice #304 dated for electricity energy consumption for December /28/ Sales invoice #304 dated for electricity energy consumption for February

21 TRADITIONAL FUEL FIRED POWER PLANTS, AS A RESULT OF REHABILITATION AND CONSTRUCTION OF THE SMALL HYOPOWER PLANTS, OPERATED BY EЕА NOVOSVIT AND ENERGOINVEST, LTD /29/ Sales invoice #359 dated for electricity energy consumption for September /30/ Sales invoice #359 dated for electricity energy consumption for December /31/ Sales invoice #359 dated for electricity energy consumption for October /32/ Sales invoice #359 dated for electricity energy consumption for November /33/ Sales invoice #359 dated for electricity energy consumption for August /34/ Certificate of state metrological attestation #9 dated TFA "Novosvit" Korsun-Shevchenkivska HPP. /35/ Certificate of the work measurement device verification #231 dated , ser. # FTA "Novosvit" Stevlivska HPP. Valid to /36/ Certificate of the work measurement device verification #232 dated , ser. # FTA "Novosvit" Stevlivska HPP. Valid to /37/ Certificate of the work measurement device verification #233 dated , ser. # FTA "Novosvit" Stevlivska HPP. Valid to /38/ Certificate of the work measurement device verification #234 dated , ser. # FTA "Novosvit" Stevlivska HPP. Valid to /39/ Certificate of the work measurement device verification #235 dated , ser. # FTA "Novosvit" Korsun-Shevchenkuvska HPP. Valid to /40/ Certificate of the work measurement device verification #236 dated , ser. # FTA "Novosvit" Korsun-Shevchenkuvska HPP. Valid to /41/ Certificate of the work measurement device verification #237 dated , ser. # FTA "Novosvit" Korsun-Shevchenkuvska HPP. Valid to /42/ Certificate of the work measurement device verification #238 dated , ser. #1076. FTA "Novosvit" Korsun-Shevchenkuvska HPP. Valid to /43/ Certificate of the work measurement device verification #239 dated , ser. # FTA "Novosvit" Korsun-Shevchenkuvska HPP. Valid to /44/ Certificate of the work measurement device verification #376 dated , ser. # FTA "Novosvit" Korsun-Shevchenkuvska HPP. Valid to /45/ Certificate of the work measurement device verification #378 dated , ser. # FTA "Novosvit" Korsun-Shevchenkuvska HPP. Valid to /46/ Certificate of the work measurement device verification #379 dated , ser. # FTA "Novosvit" Korsun-Shevchenkuvska HPP. Valid to /47/ Certificate of the work measurement device verification #530/108 dated FTA "Novosvit" Korsun-Shevchenkuvska mini-hpp. Valid to Protocol of verification #32/108 dated /48/ Certificate of the work measurement device verification #531/108 dated FTA "Novosvit" Lotashivska HPP. Valid to

22 TRADITIONAL FUEL FIRED POWER PLANTS, AS A RESULT OF REHABILITATION AND CONSTRUCTION OF THE SMALL HYOPOWER PLANTS, OPERATED BY EЕА NOVOSVIT AND ENERGOINVEST, LTD protocol of verification #31/108 dated /49/ Certificate of the work measurement device verification #532 dated , ser. # FTA "Novosvit", branch of Cherkasy. Valid to /50/ Certificate of the work measurement device verification #533 dated , ser. # FTA "Novosvit", branch of Cherkasy. Valid to /51/ Certificate of the work measurement device verification #534 dated , ser. # FTA "Novosvit", Steblivska HPP. Valid to /52/ Certificate of the work measurement device verification #535 dated , ser. # FTA "Novosvit", Steblivska HPP. Valid to /53/ Certificate of the work measurement device verification #536 dated , ser. # FTA "Novosvit", Steblivska HPP. Valid to /54/ Certificate of the work measurement device verification #537 dated , ser. # FTA "Novosvit", Steblivska HPP. Valid to /55/ Operation rules of Lysansk reservoir, Zvenygorodka reservoir, and Lotashiv reservoir at the river Gnylyi Tikych, Cherkasy region. Approved on /56/ Instruction for electrician of repair and service of electrical equipments and hydro facilities of HPP. Approved on /57/ Job description of master Y.M. Volkova of Gordashivska and Lotashivska HPP. Approved on /58/ Log book of protocols of knowledge verification at branch of Cherkasy, FTA "Novosvit". Opened on /59/ Annex 1 List of measurement devices that are in operation and have to be verified in 2010 of electrical data measurement dated December /60/ Operation journal FTA "Novosvit" Lotashivska HPP. Opened on /61/ Log journal of electrical energy accounting of FTA "Novosvit" Lotashivska HPP. Opened on /62/ Statement on electrical energy generation by Gordashivska and Lotashivska HPP, FTA "Novosvit" for November 2009 dated /63/ Annex 3 Measurement equipments and verification of measurement equipment HPP FTA "Novosvit". /64/ Report of industrial output production for /65/ Balance of production and distribution of electrical energy for /66/ Report of the work of hydro electro plant for 2009 of Lotashivska HPP. /67/ Photo - Meter # /68/ Log book of registration of generators work at Korsun-Shevchenkivska mini-hpp. Opened on /69/ Log book of registration of generators work at #2 Korsun- Shevchenkivska HPP. Opened on /70/ Statement of electrical energy generation by Korsun-Shevchenkivska HPP, Steblivska HPP, and Korsun-Shevchenkivska mini-hpp FTA "Novosvit" for November 2009 dated